National Security > COVID-19 Resource Center
27 May '20

Since it began accepting applications for its new COVID-19 Telehealth Program on April 13th, the Federal Communications Commission has awarded over $50 million to 132 health care providers in 33 states and in the District of Columbia.  The award amounts, ranging from $5,886 to $1 million, are to be used by the participating heath care providers for telecommunication services, information services and devices necessary to provide telehealth services during the COVID-19 pandemic. This alert provides an overview of the COVID-19 Telehealth program, eligibility requirements, the participants that have been selected so far and how they plan to use their Telehealth Program awards. Read more here.

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22 May '20

Leaders of Small Business Committee Reach Consensus on Bill to Extend PPP Loan Deadline, Senate Fails to Clear Measure by Unanimous Consent as Phase 4 Negotiations Likely to Dominate June

Bipartisan leaders of the Senate Small Business Committee yesterday reached agreement on legislation to double the period of time in which small businesses can use Paycheck Protection Program (PPP) loans from eight weeks to 16 weeks. The measure, dubbed the Paycheck Protection Program Extension Act, would also extend the deadline for applying for the loans until December 31. Sen. Marco Rubio (R-FL), Chairman of the Small Business Committee, pushed for the Senate to pass the legislation by unanimous consent on Thursday before the chamber left for the Memorial Day recess. However, under this approach, the request is rejected if any one senator objects, and the chamber was ultimately unable to reach consensus before adjourning.

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14 May '20

The House Democrats recently unveiled their fourth COVID-19 bill, the “Health and Economic Recovery Omnibus Emergency Solutions Act” or the ‘‘HEROES Act.” The HEROES Act, which will be negotiated with the Senate, contains a number of provisions related to broadband and telecommunications access. The Act would make available $4 billion in funding for a monthly discount of up to $50 on certain households’ internet bill, $1.5 billion for connectivity and devices for students, schools and libraries through the FCC’s E-Rate program that can be used both at-home and in the classroom, and $24 million for broadband mapping. The Act also authorizes the appropriation of funds for expansion of broadband subsidies for urban and rural hospitals. The Act further imposes certain limitations on telecommunications providers related to disconnecting service, or charging late fees, due to non-payment related to COVID-19 and requires providers of Lifeline to offer unlimited minutes and data. On the issue of prison phones, the HEROES Act would set interim rates, require that future rates be “just and reasonable” and prohibit site commissions offered to prison facilities by communications providers. Finally, the Act would repeal a 2012 mandate that requires the FCC to auction the “T-Band,” spectrum relied upon by public safety and critical infrastructure operators, for commercial use.

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13 May '20

Federal prosecutors are investigating possible fraud by applicants to the Paycheck Protection Program (PPP), Bloomberg News and other outlets report.1 The program makes loans available to small businesses to cover certain operating costs during the COVID-19 pandemic.2 A Justice Department spokesman said that an initial analysis of data from the program has already turned up several red flags for possible fraud.3 And last week, the Justice Department announced it has brought charges against two individuals for making fraudulent statements to obtain loans under the program.4 Meanwhile, Hannibal Ware, Inspector General of the Small Business Administration, which administers the program, said the SBA has initiated “dozens of investigations involving complaints of fraud.”5

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12 May '20

COVID-19 Policy Update – May 12, 2020

House Democrats Unveil Phase 4 Proposal – the HEROES Act

House Democrats today unveiled H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. The approximately $3 trillion proposal, which is outlined in greater detail below, provides nearly $1 trillion to state, local, territorial and tribal governments to pay workers such as first responders, health workers and teachers. The bill would also establish a $200 billion Heroes Fund to provide hazard pay for essential workers, enhance the employee retention tax credit and provide $10 billion for COVID-19 emergency grants through the Economic Injury Disaster Loan (EIDL) program. The HEROES Act would also provide a second round of economic impact payments of $1,200 per family member.

Majority Leader Steny Hoyer (D-MD) informed members that the House is expected to meet at 9:00 a.m. on Friday to consider the legislation. In addition, the House is expected to vote on rules changes that would allow for proxy voting and remote committee work.

Senate Majority Leader Mitch McConnell (R-KY) has made clear that Senate Republicans are pausing to assess the effectiveness of the Phase 3 package and are not likely to roll out a comprehensive Phase 4 proposal prior to the Memorial Day recess. The Majority Leader, however, released a statement on Tuesday indicating that Senate Republicans are working on a major package of COVID-related liability reforms to foster economic recovery. This package, spearheaded by Leader McConnell and Senator John Cornyn (R-TX), will extend new lawsuit protections to those on the frontlines of the COVID-19 response and the reopening, including healthcare providers, small businesses, universities and nonprofit organizations.

As public officials at all levels of government continue to escalate their responses to the pandemic, the latest actions and developments may be found below. Akin Gump will continue to provide regular policy developments related to COVID-19.

Summary of Key Policies in the HEROES Act:

Coronavirus Recovery Supplemental Appropriations Act, 2020

  • Agriculture, Rural Development, Food and Drug Administration and Related Agencies: Includes $10 billion to support program cost increases related to flexibilities provided to the Supplemental Nutrition Assistance Program (SNAP) by the Families First Coronavirus Response Act, as well as $3 billion to provide emergency financial relief to school meal providers and the Department of Agriculture’s (USDA) Child and Adult Care Food Program.
  • Commerce, Justice, Science and Related Agencies: Includes $400 million for expenses due to delays in the 2020 Decennial Census; $500 million to stop the presence of COVID-19 in correctional institutions; and $300 million for Byrne Justice Assistance Grants.
  • Financial Services and General Government: Includes $500 billion for state governments and $375 billion for local governments to mitigate the fiscal impacts of COVID-19.
  • Homeland Security: Provides $1.3 billion to the Federal Emergency Management Agency (FEMA) to respond to COVID-19.
  • Interior, Environment, and Related Agencies: Includes $2.1 billion for the Indian Health Service to address health care needs related to coronavirus for Native Americans, as well as $1 billion for building hospitals and critical infrastructure in the Insular Areas.
  • Labor, Health and Human Services, Education, and Related Agencies: Includes $100 billion in grants for hospital and health care providers (tied to additional restrictions); $75 billion for testing, contact tracing, and other activities necessary to suppress COVID-19; and $90 billion for a State Fiscal Stabilization Fund for grants to support funding for elementary and secondary schools and public postsecondary institutions.
  • Transportation, Housing and Urban Development, and Related Agencies: Includes $100 billion to provide emergency assistance to help low-income renters at risk of homelessness; $15.75 billion for operating assistance grants to support transit agencies; and $15 billion for grants to support the ongoing work of state, tribal, and territorial Departments of Transportation and local governments.

Tax Provisions

  • Provides additional economic stimulus payments in the form of a refundable tax credit of $1,200 for single filers, $2,400 for joint filers, plus $1,200 for each dependent (up to three dependents per household), with a phase-out for higher incomes. The legislation also retroactively includes any qualifying child or relative under IRC Section 152 (which includes students under age 24), not just those considered dependents for purposes of the child tax credit (which was limited to children under age 17), as eligible for dependent status for both this additional recovery rebate and the Coronavirus Aid, Relief and Economic Security (CARES) Act Economic Impact Payments.
  • Raises the amount of the Child Tax Credit (CTC) from $1,000 to $3,000 (or $3,600 for children under the age of six), makes 17-year-olds eligible, allows the credit to be fully refundable and allows advance payments of the credit to be made on a monthly basis.
  • Reduces the age for qualifying Earned Income Tax Credit (EITC) applicants from 25 to 19 (except for full-time students) and increases the upper age limit for the childless EITC from age 65 to age 66. This section also increases childless EITC amount by increasing the credit and phase-out percentages from 7.65 to 15.3 percent, increasing the earned income amount to $9,720, increasing the phase-out amount to $11,490. Under these parameters, the maximum credit amount in 2020 increases from $538 to $1,487.
  • Eliminates the $10,000 cap on State and Local Taxes (SALT) deductions.
  • Increases the per-employee limit for the Employee Retention Credit (ERC) from 50 percent of $10,000 (or $5,000 for the year) to 80 percent of $45,000 (or $36,000 for the year) per employee. A partial credit would be allowed for employers with a decline in gross receipts between 10 percent and 50 percent, and the 100 full-time employee threshold (for determining whether wages paid when an employee is providing services are qualified) would increase to 1,500 full-time employees and gross receipts of greater than $41.5 million in 2019. 
  • Creates a refundable employment tax credit capped at 50 percent of $50,000 per quarter (or $25,000 per quarter) to help certain businesses whose operations have been fully or partially suspended or who have experienced a significant decline in gross receipts with “fixed costs” including covered rent obligations, covered mortgage obligations and covered utility payments.
  • Reinstates and makes permanent a limit on the ability of pass-through business owners to deduct business net operation losses over $250,000 ($500,000 for joint filers).
  • Amends the provisions of CARES that provide for net operating loss (NOL) carrybacks by limiting carrybacks to taxable years beginning on or after January 1, 2018. In addition, this provision prohibits taxpayers with excessive executive compensation or excessive stock buybacks and dividends from carrying back losses.

Health Provisions

  • Increases Federal Medical Assistance Percentage (FMAP) payments to state Medicaid programs by a total of 14 percentage points through June 30, 2021.
  • Eliminates cost sharing for Medicaid beneficiaries for COVID-19 treatment and vaccines.
  • Establishes zero cost-sharing for COVID-19 treatment under Medicare Parts A and B and creates a new special enrollment period during the public health emergency.
  • Regarding private insurance, the measure provides for a two-month open enrollment period to allow uninsured individuals to enroll in coverage.
  • Requires the President to appoint a Medical Supplies Response Coordinator to serve as the point of contact for the health care system, supply chain officials, and states on medical supplies.
  • Includes several proposed improvements to the Strategic National Stockpile, including establishing a supply chain flexibility manufacturing pilot program.
  • Codifies the CARES Act provider relief fund to reimburse eligible providers for expenses related to responding to COVID-19 and creates a loan repayment program to improve recruitment and retention of state, local, tribal and territorial public health department workforce.

Continued Assistance to Unemployed Workers

  • Extends the $600 per week Federal Pandemic Unemployment Compensation (FPUC) supplement and the Pandemic Unemployment Assistance (PUA) benefits through January 31, 2021.
  • Includes an extension of full funding for the first week of compensable regular unemployment for states with no waiting week through January 31, 2021.

Small Business Provisions

  • Amends PPP funding by setting aside funds specifically for small Community Development Financial Institutions (CDFIs), Minority Development Institutions (MDIs), SBA microlenders, and SBA Certified Development Companies (CDCs) and mandating that 25 percent of the funds be used for small businesses with 10 or fewer employees and that another 25 percent of the funds be used solely for nonprofits.
  • Appropriates an additional $10 billion for Emergency EIDL Grants to remain available until expended.
  • Includes proposals to better support SBA’s core programs, including waiving fees associated with the SBA 7(a) and 504 loan programs for borrowers and lenders and increasing the annual lending limit of the 7(a) program from $30 billion to $75 billion.

COVID-19 HERO Act

  • Expands the use and oversight of Defense Production Act (DPA) authorities to increase production of critical medical supplies.
  • Includes several protections for renters and homeowners from evictions and foreclosures, including authorizing a $100 billion for an Emergency Rental Assistance program.
  • Suspends negative consumer credit reporting during the pandemic and provides a temporary moratorium on consumer debt collection.
  • Includes the SAFE Banking Act, which closely tracks the House-passed version of the measure. This section would allow cannabis-related businesses that have remained open as essential services to access banking services and products, as well as insurance.

Families, Workers, and Community Support Provisions

  • Expands energy assistance for low-income families, reduces barriers to Low Income Home Energy Assistance Program (LIHEAP) participation during the pandemic and temporarily increases LIHEAP agencies’ administrative resources.
  • Extends the waiver authority provided to USDA under the Families First Coronavirus Response Act to the Fresh Fruit and Vegetable Program (FFVP).
  • Temporarily suspends the current 1,250 hour eligibility requirement and reduces the tenure eligibility requirement from 12 months to 90 days under nonemergency Family and Medical Leave Act (FMLA).
  • Extends the availability of Emergency Family and Medical Leave benefits from December 31, 2020 to December 31, 2021.

Consumer Protection and Telecommunications

  • Includes the COVID-19 Price Gouging Prevention Act to prohibit the sale of consumer goods and services at excessive prices.
  • Prohibits broadband and telephone providers from terminating service due to a customer’s inability to pay their bill because of financial hardships during the pandemic.
  • Entitles households with individuals who have been laid off or furloughed to get a $50 benefit ($75 benefit on tribal lands) to put toward the monthly cost of internet service during the pandemic.
  • Authorizes $2 billion for a temporary expansion of the FCC’s Rural Health Care Program (RHCP) to partially subsidize their health care providers’ broadband service.

COVID-19 Heroes Fund

  • Establishes a $200 billion Heroes Fund. Under the provision, Treasury would award grants to essential employers to provide premium pay to essential workers.
  • While the provision does not require private employer contribution, it requires the Department of the Treasury to transfer 0.25 percent of the funds to the Department of Labor to implement an advertising campaign encouraging employers with over 500 employees to provide the same premium pay without utilizing grant funds.

Transportation and Infrastructure

  • Extends the prohibition on involuntary furloughs of employees of airlines that receive financial assistance under the CARES Act through full exhaustion of the assistance, instead of ending on September 30, 2020.
  • Includes several safety requirements for airlines, mandating that flight attendants, passengers and pilots wear face coverings. Public transit passengers would also be required to wear face coverings;
  • Enhances benefits under the Railroad Unemployment Insurance Act by extending the temporary recovery benefit that provides $1,200 every two weeks.

Senate Judiciary Committee Holds Hearing on Liability during the COVID-19 Pandemic

On Tuesday, May 12, the Senate Judiciary Committee held a hearing entitled, “Examining Liability during the COVID-19 Pandemic.” Chairman Lindsey Graham (R-SC) argued that federal liability protections are necessary but must be limited in scope and not provide complete immunity. The Chairman emphasized the need to ensure that bad actors are not given a break, but rather, that liability reforms be afforded to those who are making good faith efforts to do right by their patients, employees and customers. Chairman Graham also highlighted the need to swiftly finalize a regulatory Occupational Safety and Health Administration- (OSHA) driven process for large, small and intermediate businesses. In acknowledging that the threat of lawsuits may detour businesses from reopening, Ranking Member Dianne Feinstein (D-CA) reiterated her commitment to ensuring that businesses act responsibly and follow federal safety guidelines, but stopped short of endorsing federal liability reforms.  The partisan battle over lawsuit limits is expected to be waged over the next several weeks as Republicans and Democrats try to negotiate a Phase 4 package after Memorial Day. 

More States Take First Steps to Reopen; Others Announce Extensions of Emergency Measures  

A number of states have announced initials steps to reopen their economies in response to the three-phase guidelines issued by the Administration on April 16 in addition to the following recent state actions, a complete list of state status may be found at this link: 

·       Nevada – Gov. Steve Sisolak signed an executive order on May 8 outlining the first phase of the state’s reopening plan. Effective May 9, all businesses that engage in retail sales may allow customer access in store with a maximum occupancy of 50 percent, drive-in theaters may reopen, nail care salons and barber shops may reopen, and restaurants and food establishments may provide onsite dining. All business reopenings are permitted provided that businesses adhere to the safety provisions outlined in the order. The stay-at-home order is still set to expire on May 15.

·       Rhode Island – Gov. Gina Raimondo signed an updated executive order on May 8 extending the state of emergency until June 8 and allowing some businesses to begin to reopen. Governor Raimondo did not extend the stay-at-home order which expired on May 8. Effective May 9, all non-critical retail businesses with a physical location in Rhode Island shall be permitted to reopen for in-store pickup and limited browsing only and will be required to operate in accordance with the social distancing protocols set forth by RIDOH. Elective medical procedures and other medical services shall be allowed to resume and the Department of Environmental Management shall start reopening state parks in a graduated manner.

·       Virginia – Gov. Ralph Northman signed an updated executive order to allow businesses to slowly reopen in the state. Effective May 15, restaurants may operate delivery, take-out, and outdoor dining and beverage services only, brick and mortar retail business not listed in section C may continue to operate, fitness centers may reopen for outdoor activities only, and barbershops and other personal care services may reopen. All businesses reopening must comply with the Guidelines for All Business Sectors and the sector-specific guidelines.

·       Wisconsin – Gov. Tony Evers signed an updated executive order easing some of the restrictions of the state’s stay-at-home order. Effective May 11, standalone or strip mall-based retail stores with an entrance to the outside may offer in-person shopping for up to five customers at a time provided they observe social distancing requirements outlined in Section 26 of Emergency Order #28 signed by Governor Evers. Drive-in theaters may also open subject to the restrictions outlined in the order.

 

President Trump and Administration Officials Deliver Remarks on Testing

 

On Monday, May 11, President Trump and Administration officials conducted a briefing on testing. Highlights of the discussion included:

 

·       The Food and Drug Administration (FDA) has issued the first emergency use authorization (EUA) for a COVID-19 antigen test.

·       President Trump indicated that the country is on track this week to pass 10 million coronavirus tests conducted.

·       The President announced that the Administration is distributing $11 billion from the CARES Act to states, territories and tribes to allow them to meet their testing goals.

·       President Trump also announced that the Administration will provide collection supplies to help states meet their targets. In May, the Federal Emergency Management Agency (FEMA) and the Department of Health and Human Services (HHS) will be delivering 12.9 million swabs to states.

·       The Administration has partnered with the private sector to coordinate delivery of over 90 million N95 masks, 126 million surgical masks, nine million face shields and other personal protective equipment (PPE).

·       When asked about the merits of providing a second round of direct payments to Americans, as proposed by House Democrats, President Trump indicated that negotiations on the issue are ongoing, and he also reiterated the need for a payroll tax cut in a future COVID-19 relief package.

·       ADM Brett Giroir, HHS Assistant Secretary for Health, stated that the Secretary’s Office of Minority Health will soon be awarding a contract to guarantee a national network of state, local and community-based organizations to ensure that minority groups are linked to the resources they need.

White House Briefing Highlights

On Tuesday, May 12, White House Press Secretary Kayleigh McEnany conducted a briefing from the White House Press Briefing Room. Highlights of the discussion included:

·       White House Press Secretary Kayleigh McEnany began the press briefing by highlighting critical aspects of the Trump Administration’s COVID-19 response. In particular, she noted that the Administration has procured 100,000 ventilators in 100 days, which is three times the amount produced in the average year.

·       On testing, McEnany emphasized that all 50 states are testing at a higher rate per capita than South Korea. She also underscored the importance of focusing on preventative measures to limit the spread of the virus, such as using face coverings, washing hands and practicing social distancing.

·       McEnany confirmed that the virus has disproportionately affected individuals in medically underserved communities. She mentioned that the Administration has distributed $12 billion in provider relief fund payments to support the hardest-hit hospitals. In addition, she stated that President Trump has approved $583 million to expand testing to over 1,300 health centers across the nation.

·       In response to questions regarding a vaccine, McEnany noted that there are currently eight candidates for vaccines, stressing that President Trump would work to ensure that it is affordable for everyone.

·       McEnany reiterated President Trump’s desire for a payroll tax cut, describing it as a “regressive tax,” meaning that the lowest-wage workers would benefit the most.

·       When asked about statements made by Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases, about not having “total control of the outbreak,” McEnany applauded the American private sector for its success in expanding testing. She also encouraged every state and governor to follow President Trump’s phased guidelines to reopen their economies.

 

Relevant Links

·       Phase 3: Updated FAQs on the Provider Relief Fund

·       Phase 3: HUD Allocates Third Wave of Cares Act Funding Providing $1 Billion for Communities to Bolster Coronavirus Response and Relief Efforts

·       Phase 3: U.S. Department of Labor Issues Guidance Announcing the Availability of $100 Million in Short-Time Compensation Grant Funds for States

·       Phase 4: HEROES Act Section-By-Section Summary

·       Phase 4: HEROES Act Full Text

·       Phase 4: HEROES Act Financial Services Summary

·       Phase 4: HEROES Act Small Business Summary

·       Phase 4: HEROES Act Small Business Fact Sheet

·       House: Pallone and Neal Demand Transparency into Methodology and Distribution of COVID-19 Health Care Provider Relief Funds

·       Senate: McConnell Delivers Remarks on Senate Republicans’ Package of COVID-Related Liability Reforms

·       Senate: Cardin, Booker Release Plan to Prevent Underserved & Underbanked Small Businesses from Falling Further Behind During the COVID-19 Economic Crisis

·       FCC: FCC Grants GE Healthcare Waiver to Expedite Medical Equipment

·       FDA: FDA Authorizes First Antigen Test to Help in the Rapid Detection of the Virus that Causes COVID-19 in Patients

·       CMS: CMS Releases FY 2021 Inpatient Prospective Payment Systems (IPPS) Proposed Rule

·       CMS: Medicare Pharmacies and Other Suppliers May Temporarily Enroll as Independent Clinical Diagnostic Laboratories to Help Address COVID-19 Testing

·       CMS: Medicare Accelerated and Advance Payment Program Data

·       CDC: Provider Relief Fund COVID-19 High-Impact Payment Allocation Methodology

·       U.S. Chamber Institute for Legal Reform Report Highlights Liability Protections Congress Should Pass Immediately

·       States: Updated Contact Information for FEMA Regional Offices

·       States: The Wall Street Journal Guide to State Lockdowns

·       States: National Governors Association (NGA) COVID-19 Resources

·       States: Stateside Associates: New Executive, Legislative And Regulatory Actions Issued By State/Local Governments

Akin Gump Alerts and Other Resources

Akin Gump COVID-19 Resource Center

COVID-19 U.S. State and Local Response Map

50 State Survey – Coronavirus-Related “Stay at Home” Orders

Public Law and Policy: Commerce Republicans Introduce COVID-19 Data Privacy Bill to Include in Next Relief Package

 

 

 

 

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08 May '20

Republican members introduced legislation on May 7, 2020, to give Americans more control over and insight into how their personal health, proximity and geolocation data is used during the novel coronavirus, or COVID-19, pandemic. The bill’s introduction reflects the growing number of privacy and surveillance concerns during the public health emergency as the industry develops their own standards for how they will conduct contact tracing and other efforts to slow the spread of the virus. The bill’s sponsors have underscored the need to include the measure in the next COVID-19 relief package, but the bill lacks support from key Senate Democrats.

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07 May '20

Senate Elevates Bipartisan Calls for Revisions to Paycheck Protection Program

This week Senate Republicans and Democrats have underscored the need for a number of changes to the Paycheck Protection Program (PPP) established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. These proposed changes include:

  • Extending the program’s eight-week covered period to deploy PPP funds and earn loan forgiveness to 16 weeks after the loan is disbursed for businesses whose revenues have declined by at least 25 percent
  • Raising the PPP’s non-payroll forgiveness cap from 25 percent to 50 percent
  • Allowing small businesses to deduct expenses paid with a forgiven PPP loan from their taxes.

Sen. Michael Bennet (D-CO) and Sen. Todd Young (R-IN) announced proposals on Tuesday, May 5 to make enhancements to the PPP to support restaurants and other affected businesses. The proposal would extend the program’s eight-week covered period to deploy PPP funds and earn loan forgiveness to 16 weeks. In addition, the pair proposed changing the eligibility criteria for loans by allowing small businesses to simply self-certify that they have suffered a 25 percent loss in revenue during the eight-week covered period, rather than compared to the eight-week period preceding February 15, 2020, or an eight-week period a year ago. The senators have also proposed creating the RESTART loan program, which would provide funding for the hardest-hit businesses through 2020, as well as loan forgiveness.

The following day, Sen. Bob Menendez (D-NJ) and Sen. John Cornyn (R-TX) led a bipartisan group of members in urging U.S. Treasury Secretary Steven Mnuchin and Small Business Administrator Jovita Carranza to raise the PPP’s non-payroll forgiveness cap from 25 percent to 50 percent. This would allow small businesses to spend up to 50 percent of the loan proceeds on the statutorily allowed non-payroll expenses such as rent, utilities and mortgage interest payments.

Senate Finance Committee Chairman Chuck Grassley (R-IA), Senate Small Business Committee Chairman Marco Rubio (R-FL), Sen. John Cornyn, Sen. Ron Wyden (D-OR) and Sen. Tom Carper (D-DE) have also introduced a measure to make clarifications to the PPP to allow small businesses to deduct expenses paid with a forgiven PPP loan from their taxes. The measure follows guidance from the Internal Revenue Service (IRS) this week, which clarified that expenses associated with forgivable loans under the PPP are ineligible for tax deductions.

As public officials at all levels of government continue to escalate their responses to the pandemic, the latest actions and developments may be found below. Akin Gump will continue to provide regular policy developments related to COVID-19.

Potential Policy Items for Phase 4 of the Coronavirus Response

The House expects to return to Washington, D.C. in full the week of May 1, after delaying their return amid ongoing concerns about exposure to the virus. The Senate officially returned this week. As discussions for the next recovery package pick up over the next few weeks, lawmakers have outlined their positions for a Phase 4 bill, which they will have to balance with other essential matters unrelated to the COVID-19 pandemic.

Below is a list of each negotiator’s policy priorities that will likely shape the Phase 4 package.

The White House

  • Payroll Tax - President Donald Trump has repeatedly emphasized his support for a cut or suspension of payroll taxes, which already faces resistance from Congress. The White House is expected to release an official proposal regarding broader economic policies later this week.
  • Incentives for Businesses - The Administration is also considering tax credits or other ways to incentivize businesses to move their manufacturing to the United States. President Trump’s aides also have discussed including liability protections for businesses that bring their employees back to work. Other policy proposals coming out of the White House include expanding the business expense tax deduction to allow companies to write off new investments.
  • Relief for Individuals - White House aides are also considering asking Congress for the authority to send an additional round of direct cash assistance to individual taxpayers, in addition to the $1,200 that many Americans received in recent weeks as part of the CARES Act.
  • Infrastructure - President Trump has long expressed interest in including infrastructure spending in any future congressional recovery package, arguing that it would help stimulate the economy and create jobs.

House and Senate Republicans

  • Liability Relief for Businesses - Senate Majority Leader Mitch McConnell (R-KY) has made the inclusion of provisions to limit businesses’ legal liability from lawsuits by workers or consumers related to the spread of the coronavirus his top priority in the next recovery bill.
  • Relief for the Oil and Gas Industry - Provide funding to purchase oil for the Strategic Petroleum Reserve for “necessary expenses related to the acquisition, transportation, and injection of domestic petroleum products,” which was included in an earlier draft of the CARES Act.
  • Aid to State and Local Governments - After receiving criticism for comments suggesting that some states declare bankruptcy, Leader McConnell has indicated that he would consider additional relief measures, stressing that the Senate would not look to address issues prior to the COVID-19 crisis.

House and Senate Democrats

Prior to the Senate passage of the CARES Act, House Speaker Nancy Pelosi (D-CA) released the Take Responsibility for Workers and Families Act, legislation that offered insight into House Democrats’ priorities. The package was based on submissions from the chairs of all relevant House committees and represents a broad view of potential policy measures that will be refined further, based on changing circumstances related to COVID-19 and the overall economic outlook. Earlier this month, Democrats on the House Financial Services Committee released a $301 billion package of their priorities for Phase 4 of the COVID-19 response, aiming to provide targeted assistance and critical protections for individuals, families, renters and homeowners, students, small businesses and non-profits, municipal governments, global markets and developing countries.

  • Aid to State and Local Governments - Provide up to $1 trillion in aid for state and local governments to strengthen COVID-19 response efforts and to counter the lost business revenues due to the economy closing.
  • District of Columbia, U.S. Territories and Tribes - Direct the Federal Reserve to purchase bonds issued by tribes and territories; direct the Treasury Department to ensure that at least 10 percent of CARES Act funds support impoverished counties; provide $10 billion for the Community Development Block Grant; waive matching requirements for municipal governments to receive federal grants.
  • Relief for Individuals - Include stronger worker protections, raise direct cash payments to Americans from $1,200 to $1,500, provide free testing and treatment, and increase Supplemental Nutrition Assistance Program (SNAP) by 15 percent.
  • Infrastructure - In January, House Democrats released their five-year, $760 billion infrastructure framework (press release; framework; fact sheet) that will likely be the jumping-off point for many of their ideas. Speaker Pelosi has also endorsed a plan that would provide $80 billion for broadband deployment. Despite having support from the White House, Leader McConnell has rejected the Democrats’ infrastructure package, according to lawmakers.
  • Voting Provisions - Secure a federal mandate that would require states to provide remote voting options, including vote-by-mail, with funding for states to implement the measure, which would cost nearly $4 billion to implement.
  • Amend the PPP - Expand funding for the PPP and make changes to both expand and limit eligibility.
  • Energy - Implement clean energy or emissions conditions for commercial aviation and cruise ship industries; provide extensions for clean energy tax credits that had been left out of a year-end tax extenders package in December 2019.

Other Congressional Priorities

While COVID-related legislation remains a priority for Congress and the Administration, other issues are likely to be considered.

  • Nominations - Leader McConnell has been vocal about prioritizing the confirmation of nominees to serve in the Trump Administration awaiting votes, including 15 District Court judges and picks for the U.S. Courts of Appeals for the Fifth and District of Columbia Circuits. He also announced that the Senate would work to fill key vacancies for national security positions and other posts related to combatting COVID-19.
  • Foreign Intelligence Surveillance Act (FISA) - After managing to agree to a 77-day extension of the expiring authorities under FISA, Leader McConnell has indicated that he would consider the legislation (S. 3501) with amendments. The House has already passed its version (H.R. 6172) of the surveillance statute.
  • Fiscal Year (FY) 2021 Spending Bills - According to House Majority Whip Steny Hoyer (D-MD), the House is still expected to consider regular appropriations bills for FY 2021 as early as June. It remains unclear whether the Senate holds any markups or takes up any spending bills, which signals that there will likely be a need for a continuing resolution to avoid a government shutdown later this fall.
  • National Defense Authorization Act (NDAA) - Senate and House Armed Services Committees Chairmen Jim Inhofe (R-OK) and Adam Smith (D-WA) have announced plans to consider measures this summer to reauthorize the NDAA.
  • Energy and Land Conservation Legislation - Prior to the disruption created by the COVID-19 outbreak, Leader McConnell expressed interest in considering a package of energy (S. 2657) and land conservation (S. 3422) bills.
  • Remote Voting - Upon their return, the House is expected to vote on measures that would enable remote voting due to ongoing concerns of the virus spreading.

Industry Requests

  • Postal Service - In a letter to lawmakers last week, trade groups urged Congress to provide relief funding for the United States Postal Service, projecting a 50 percent or more decrease in revenues.
  • Oil and Gas - Due to the sharp and rapid decrease in oil prices based on the lack of demand and turmoil between OPEC and non-OPEC countries over production, the industry will likely request a package of federal relief measures.
  • Restaurants - Requesting the creation of a $120 billion fund to assist the industry that would exclude publicly traded companies, chains and franchises.
  • Lenders - According to a letter sent to the SBA, lenders have asked the agency to strengthen its system for processing emergency small business loans.
  • Medical Technology - Lift Section 301 tariffs on components for ventilators and medical imaging equipment subject to penalties from China.
  • Hotels - In a letter sent to congressional leadership, the industry has asked for changes to the SBA’s PPP program that would allow hotels to spend less of the money received on payroll.
  • Broadcasters and newspapers - Amend the rules for the SBA programs to expand the number of TV stations, radio stations and newspapers with more than 500 employees to apply for loans.
  • Housing - According to a letter sent to congressional leaders, many housing groups have requested rental assistance to avoid evictions.

More States Take First Steps to Reopen; Others Announce Extensions of Emergency Measures  

A number of states have announced initials steps to reopen their economies in response to the three-phase guidelines issued by the Administration on April 16. In addition to the following recent state actions, a complete list of state status may be found at this link

  • Arkansas: Gov. Asa Hutchinson announced that, effective May 4, gyms, fitness centers, athletic clubs and weight rooms may reopen, provided they meet the requirements outlined in the order. Effective May 6, barber shops, body art establishments, cosmetology establishments, massage therapy clinics/spas and medical spas may reopen, provided they abide by the requirements outlined in the order. Effective May 11, restaurant dine-in operations may resume, provided seating is limited to 33 percent of total seating capacity and a number of other social distancing guidelines are followed.
  • Illinois: Gov. J.B. Pritzker announced that effective May 1, the order more broadly defines essential businesses that are permitted to resume operations as well as allows non-essential businesses to reopen for the limited purposes of fulfilling minimum basic operations. In addition, all businesses that resume operations must follow social distancing requirements to ensure the health of employees and customers. Examples of businesses that may resume operations include grocery stores, and manufacturing, distribution and supply chain facilities for critical products and industries.
  • Indiana: Gov. Eric Holcomb announced an executive order to begin reopening the state. The order outlines two stages of an early plan to reopen the state. Stage 1 spans from May 1 through May 3, while Stage 2 begins May 4 and lasts through May 23. The order outlines social distancing and health guidance that apply to all businesses. During Stage 2, all retail businesses, dine-in services and personal service businesses, such as barber shops and spas, will be allowed to open, provided that they comply with the regulations detailed in the order.
  • Maryland: Gov. Larry Hogan extended the state of emergency and stay-at-home order on May 6. Gov. Hogan did not announce an end date for the order, but stated that if the number of positive cases began to decline then the state could begin to reopen as early as May 11. The order did loosen restrictions on elective surgeries and some outside activities.
  • Michigan: Gov. Gretchen Whitmer issued new executive orders on April 30 that extended the state of emergency through May 28 and the stay-at-home order through May 15. Gov. Whitmer also signed an executive order keeping bars, gyms, casinos and theaters closed, and only allowing restaurants to do delivery or takeout service through May 28.
  • Nevada: Gov. Steve Sisolak extended the stay-at-home order through May 15. Effective May 1, non-essential retail businesses identified in earlier directives may resume retail sales on a curbside or home delivery basis only. Businesses reopening under this provision must adopt measures to minimize the risk of spread of COVID-19, including social distancing and sanitation measures. Licensed cannabis dispensaries may engage in retail sales on a curbside pickup or home delivery basis.
  • New Hampshire: Gov. Chris Sununu extended the stay-at-home order through May 31 and released the state’s plan for reopening. Effective May 11, all retail establishments whose physical facilities were previously closed may open their facilities to workers, customers and the public if they operate in accordance with the guidelines outlined in the order. On May 11, barbers, hair salons and other cosmetology businesses may open, if they operate in accordance with the guidelines outlined in the order.
  • New Mexico: Gov. Michelle Lujan Grisham extended the state’s emergency public health order through May 15. Effective April 30, the order broadens the definition of an “essential business” to include retail spaces, manufacturing operations and other businesses. Essential businesses may remain open, provided they minimize their operations and staff to the greatest extent possible, and adhere to social distancing protocol.
  • North Carolina: Gov. Roy Cooper signed a new executive order on May 5 to modify the stay-at-home order and begin the transition to Phase 1 of reopening the state. The order removed the distinction between essential and non-essential businesses, and allows retail businesses to open at 50 percent capacity. Bars, personal care shops, gyms and entertainment venues remain closed.
  • North Dakota: Gov. Doug Burgum announced on April 29 that businesses may begin to reopen on May 1. Businesses closed under Executive Order 2020-06.3, and referenced in paragraphs 2-8 in the order, may reopen on May 1, 2020. In-house dining may also resume on May 1. The order also provides resources for additional guidance to which businesses must adhere upon reopening.
  • South Dakota: Gov. Krisi Noem released the state’s plan to reopen on April 28. The plan encourages retail and other businesses to resume operations in a manner that allows for reasonable physical distancing, good hygiene and appropriate sanitation.
  • Utah: Gov. Gary Herbert released an updated version of Utah’s plan to reopen. Effective May 1, the Utah COVID-19 Public Health Risk Status is moved from Red to Orange. Individuals and businesses in Utah shall comply with the Orange provisions of the Utah Leads Together Plan. Under the Orange status, limited businesses, such as retail establishments and restaurant dine-in services, will be allowed to resume operations, provided they follow strict guidelines for physical distancing and monitor employees for changes in health.

Relevant Links

Akin Gump Alerts and Other Resources

Akin Gump COVID-19 Resource Center

COVID-19 U.S. State and Local Response Map

50 State Survey – Coronavirus-Related “Stay at Home” Orders

Tweets

U.S. Department of Health and Human Services (HHS):

  • Tweet at 12:19 PM, May 4, 2020 (Link)
    • “COVID-19 funding is available to minority, rural and socially vulnerable communities for linkages to services, information and education. Read the full news release here.

Federal Reserve:

  • Tweet at 3:32 PM, May 5, 2020 (Link)
    • “The Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency announce rule change to support the flow of credit to households and businesses: (Press Release)
  • Tweet at 5:02 PM, May 6, 2020 (Link)
    • “The Federal Reserve and Federal Deposit Insurance Corporation extend two resolution plan deadlines here.

U.S. Department of the Treasury:

  • Tweet at 9:50 AM, May 5, 2020 (Link)
    • “Joint statement by Treasury Secretary Steven T. Mnuchin and Secretary of the Interior David L. Bernhardt on distribution of Coronavirus Relief Fund dollars to Native American tribes here.

Centers for Medicare & Medicaid Systems (CMS) Administrator Seema Verma:

  • Tweet at 4:59 PM, May 5, 2020 (Link)
    • “Today, CMS released additional Medicaid & CHIP guidance to states to help combat the COVID19 pandemic. Topics covered include: eligibility & enrollment flexibilities, benefit flexibilities, financing flexibilities. Learn more here.”

U.S. Small Business Administration (SBA) Administrator Jovita Carranza:

  • Tweet at 7:03 PM, May 5, 2020 (Link)
    • “SBA requires all Paycheck Protection Program borrowers to certify that the PPP loan is necessary to support ongoing operations. SBA is extending the safe harbor deadline for borrowers who applied before April 24th to return PPP funds. The new deadline is 5/14/2020.”

Read More

01 May '20

Federal Reserve Board Announces Expanded Scope and Eligibility for the Main Street Lending Program

The Federal Reserve Board unveiled plans yesterday to expand the scope and eligibility for the Main Street Lending Program after feedback from over 2,000 individuals, businesses and nonprofits. The program, established under Section 13(3) of the Federal Reserve Act, was provided $75 billion under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help credit flow to small and medium-sized businesses.

The Board will create a third loan option, with increased risk sharing by lenders for borrowers with greater leverage. This new loan option allows lenders to retain a 15 percent share on loans that, when added to existing debt, do not exceed six times a borrower’s income. The creation of this new option, dubbed “expanded” loans, joins the new and priority loan options.

In addition, the Board outlined plans to lower the minimum loan size for certain loans from $1 million to $500,000 and expand the pool of businesses eligible to borrow to businesses with up to 15,000 employees, or those with up to $5 billion in annual revenue. The chart below summarizes the three loan options.

Click here to view the graph. 

As public officials at all levels of government continue to escalate their responses to the pandemic, the latest actions and developments may be found below. Akin Gump will continue to provide regular policy developments related to COVID-19.

Pelosi Names Members to House Select Committee on the Coronavirus Crisis

On Wednesday, House Speaker Nancy Pelosi (D-CA) appointed Members to serve on the bipartisan House Select Committee on the Coronavirus Crisis established by the CARES Act. The Committee, which aims to provide oversight of the federal COVID-19 response and ensure efficient use of taxpayer dollars, will be chaired by House Majority Whip Jim Clyburn (D-SC). Other Democratic members of the Committee include Reps. Maxine Waters (D-CA), Carolyn Maloney (D-NY), Nydia Velázquez (D-NY), Bill Foster (D-IL), Jamie Raskin (D-MD) and Andy Kim (D-NJ). House Minority Leader Kevin McCarthy (R-CA) has not yet announced which Republican Members will be appointed to the Committee.

CMS Issues Second Round of Regulatory Waivers and Rule Changes

The Centers for Medicare & Medicaid Services (CMS) yesterday issued a second round of regulatory waivers and rule changes to deliver expanded care to seniors and provide greater flexibility during the COVID-19 pandemic. Medicare will no longer require an order from the treating physician or other practitioner for beneficiaries to get COVID-19 tests and certain laboratory tests required as part of a COVID-19 diagnosis. CMS is also announcing that Medicare and Medicaid are covering certain antibody tests, and Medicare and Medicaid will cover laboratory processing of certain FDA-authorized tests that beneficiaries self-collect at home. Additional information on new waivers and flexibilities for health care providers is available here.

Wicker, Thune, Moran, Blackburn Announce Plans to Introduce Data Privacy Bill

Yesterday, Senate Commerce Committee Chairman Roger Wicker (R-MS), Majority Whip John Thune (R-SD), and Senators Jerry Moran (R-KS) and Marsha Blackburn (R-TN) announced plans to introduce the COVID-19 Consumer Data Protection Act of 2020. The upcoming narrowly-tailored bill is aimed at giving Americans more control over, and insight into, how their personal health, proximity and geolocation data is used during the current health crisis. The Act requires companies to obtain express consent in order to collect, process or transfer this type of data for the purposes of tracking the spread of COVID-19. It also allows individuals to opt out of the collection and use of this data, and directs companies to be transparent to the public by describing their data collection practices in relation to the pandemic. Further, companies must de-identify all personally identifiable information (PII) when it is no longer being used for the health emergency. The Federal Trade Commission and state attorneys general are given enforcement authority, and state and local laws and regulations are preempted under the Act.  

Labor Department Issues Guidance on Pandemic Unemployment Assistance

The Department of Labor (DOL) issued guidance on Monday that addresses questions about work search and job refusal when an individual receives Pandemic Unemployment Assistance (PUA). This guidance clarifies that individuals who do not go to work solely due to general concerns about exposure to COVID-19, or those who refuse work in order to file for unemployment benefits, would not qualify for PUA, unless the individual is unable to work as a direct result of COVID-19. Regarding requirements for individuals to search for work while collecting PUA benefits, applicable state unemployment compensation (UC) laws related to continued claims are applicable to PUA claims. However, states may use emergency flexibility to temporarily modify work search requirements to respond to the spread of COVID-19.

More States Take First Steps to Reopen; Others Announce Extensions of Emergency Measures  

A number of states have announced initials steps to reopen their economies in response to the three-phase guidelines issued by the Administration on April 16 in addition to the following recent state actions, a complete list of state status may be found at this link

  • Arizona: Governor Doug Ducey announced that the state’s stay-at-home order would be extended to May 15, with some modifications for businesses. Non-essential retailers will be allowed to open with restrictions on May 8 and restaurants could possibly open on May 12.
  • Iowa: Governor Kim Reynolds announced that effective May 1 in 77 counties, the following businesses may choose to reopen but must comply with restrictions. Restaurants, fitness centers, libraries and retail stores may reopen at 50 percent of normal operating capacity. Enclosed malls may also reopen at 50 percent capacity, but play areas and common seating areas including food court dining areas must remain closed. Restaurants in food courts may reopen on a carry-out basis. Race tracks, other than a track conducting horse or dog races, may reopen and resume operations as long as it does not permit any spectators to attend events in person. All theaters, for live performances or motion pictures must remain closed. Social community, recreational, leisure and sporting activities will continue to be limited to 10 people. The restrictions on religious gatherings have been lifted, but they must adhere to social distancing guidelines.
  • New Jersey: Governor Phil Murphy announced that effective at 6:00 a.m. on May 2, all state parks and forests shall open to the public for the recreational activities listed in which social distancing can be readily achieved. Golf courses shall be allowed to reopen to the public and to members associated with private golf clubs on the condition that such businesses adopt the policies listed in the order.
  • West Virginia: Governor Jim Justice announced that phase 1 of reopenings would begin the week of April 30, allowing hospitals to resume elective procedures and outpatient health care operations may resume provided that the facilities have a plan in place to safely phase-in procedures based on CDC guidelines. If phase 1 is sees no spike in new cases, then specific businesses will begin to operate with physical distancing measures in effect including small businesses with fewer than 10 employees, businesses providing professional services and outdoor dining areas of restaurants. Additional business may reopen after 3 weeks based on the recommendations of state medical experts and available data.
  • Washington: Governor Jay Inslee announced on April 29 that construction activities and elective surgeries may resume in the state beginning May 1. Gov. Inslee also stated the stay-at-home order which was set to expire on May 4 will most likely be extended, however no further details were provided.

President Trump Delivers Remarks on Protecting America’s Seniors

On Thursday, April 30, President Trump delivered remarks on protecting America’s seniors. Highlights of his remarks included:

  • President Trump stated that he would sign a proclamation declaring the month of May “Older Americans Month.”
  • President Trump announced that the Federal Emergency Management Agency (FEMA) will send a seven-day supply of personal protective equipment (PPE) to all 15,400 Medicaid and Medicare certified nursing homes. FEMA will coordinate the shipments of surgical masks, gloves, eye protection and gowns set to begin the first week of May and be completed in mid-June.
  • The Centers for Medicare & Medicaid Services (CMS) is providing states with $81 million from the CARES Act to support state and local efforts related to nursing homes.
  • This week, the Administration will be finalizing a new rule requiring information about COVID-19 cases in nursing homes to be reported directly to the Centers for Disease Control and Prevention (CDC) and testing data to be posted online. The rule will also require nursing homes to report cases to residents and their family members.
  • President Trump also announced the creation of the Coronavirus Commission for Safety and Quality in Nursing Homes, which will be overseen by CMS and comprised of leading industry experts, doctors and scientists, resident and patient advocates, family members, infection and prevention control specialists and state and local authorities. The commission will convene in May and issue recommendations to protect America’s seniors.
  • CMS Administrator Seema Verma announced that CMS will soon make an important announcement to lower the price of insulin for seniors.
  • President Trump highlighted progress made on vaccines and therapeutics, noting that Gilead’s Remdesivir is showing encouraging preliminary results.
  • Department of Health and Human Services (HHS) Secretary Alex Azar indicated that HHS has dispersed more than $1 million in grants to aging and disability networks.

Relevant Links

Akin Gump Alerts and Other Resources

Akin Gump COVID-19 Resource Center

COVID-19 U.S. State and Local Response Map

50 State Survey – Coronavirus-Related “Stay at Home” Orders

Corporate Transactions: Launch of Coronavirus Large Business Interruption Loan Scheme for UK Businesses

Tweets

U.S. Department of Health and Human Services (HHS):

  • Tweet at 1:24 AM, April 30, 2020 (Link)
    • “NEWS: HHS, through the Health Resources and Services Administration, has awarded $20 million to increase telehealth access and infrastructure for providers and families to help prevent and respond to COVID19. Read more here.

Federal Reserve:

  • Tweet at 2:01 PM, April 29, 2020 (Link)
  • Tweet at 10:02 AM, April 30, 2020 (Link)
    • “The Federal Reserve expands the scope and eligibility of its Main Street Lending Program for more small and medium-sized businesses: (Press Release). More information and FAQs here.”

U.S. Department of the Treasury:

  • Tweet at 8:30 AM, April 30, 2020 (Link)
    • “Readout from a Treasury spokesperson on Secretary Mnuchin’s call with G7 Finance Ministers. (Press Release)

U.S. Small Business Administration (SBA) Administrator Jovita Carranza:

  • Tweet at 7:33 PM, April 28, 2020 (Link)
    • “To further ensure Paycheck Protection Program loans are limited to eligible borrowers, SBA has decided, in consultation with the U.S. Treasury, that it will review all loans in excess of $2 million, in addition to other loans as appropriate.”

Read More